GPO Assessments and Comparative Benchmarking
A. Background
The healthcare industry continues to evolve; mergers, affiliations, consortiums, systems integration, the effects of managed care and concerns over fixed payment systems have prompted renewed efforts to enhance operational efficiencies in all areas of healthcare delivery. Similarly, there is an increased focus on the manner by which supplies, drugs, equipment, and services are selected.
Assessing the performance of the current Group Purchasing Organization (GPO) and/or evaluating alternative approaches to contracting have become a complex process that goes beyond portfolio price variations. GPOs no longer simply provide contracts; they provide other value added strategies as well. Therefore, an assessment inclusive of financials, clinical, added-value services, organizational alignment, and business strategies (commitment, decision-making, cost management, etc.) is prudent to making a good business decision. Therefore, hospital administrators are more frequently looking to firms like Synergy Consulting Associates to perform an objective assessment on their behalf.
From evaluation of strategic fit through negotiation and implementation support, SCA applies a pragmatic tailored unbiased approach to produce a detailed, defendable product. Our flexibility, speed of execution and knowledge of the ever-changing GPO marketplace are keys to our success in this field.
SCA provides collaborative solutions to its customers’ challenge to reduce expenses while enhancing overall performance and operational efficiencies. SCA has materials management and other healthcare professionals with extensive knowledge and experience in healthcare group purchasing organizations, supply chain strategy, pricing, selection, procurement, distribution, utilization, standardization, and contracting, as well as the ability to work with clinical and non-clinical staff alike at all levels. SCA consultants have either conducted similar analyses, facilitated GPO conversions, and/or have actually managed a group purchasing organization.
Our associates have conducted GPO Analysis for many leading healthcare organizations (see an abbreviated list below) since 1995, and developed industry standards for analyzing the quantitative and qualitative variables most important to creating an effective GPO affiliation.
The healthcare industry continues to evolve; mergers, affiliations, consortiums, systems integration, the effects of managed care and concerns over fixed payment systems have prompted renewed efforts to enhance operational efficiencies in all areas of healthcare delivery. Similarly, there is an increased focus on the manner by which supplies, drugs, equipment, and services are selected.
Assessing the performance of the current Group Purchasing Organization (GPO) and/or evaluating alternative approaches to contracting have become a complex process that goes beyond portfolio price variations. GPOs no longer simply provide contracts; they provide other value added strategies as well. Therefore, an assessment inclusive of financials, clinical, added-value services, organizational alignment, and business strategies (commitment, decision-making, cost management, etc.) is prudent to making a good business decision. Therefore, hospital administrators are more frequently looking to firms like Synergy Consulting Associates to perform an objective assessment on their behalf.
From evaluation of strategic fit through negotiation and implementation support, SCA applies a pragmatic tailored unbiased approach to produce a detailed, defendable product. Our flexibility, speed of execution and knowledge of the ever-changing GPO marketplace are keys to our success in this field.
SCA provides collaborative solutions to its customers’ challenge to reduce expenses while enhancing overall performance and operational efficiencies. SCA has materials management and other healthcare professionals with extensive knowledge and experience in healthcare group purchasing organizations, supply chain strategy, pricing, selection, procurement, distribution, utilization, standardization, and contracting, as well as the ability to work with clinical and non-clinical staff alike at all levels. SCA consultants have either conducted similar analyses, facilitated GPO conversions, and/or have actually managed a group purchasing organization.
Our associates have conducted GPO Analysis for many leading healthcare organizations (see an abbreviated list below) since 1995, and developed industry standards for analyzing the quantitative and qualitative variables most important to creating an effective GPO affiliation.
- Alliant Management, Louisville, KY
- Bethesda Health System, FL
- Catholic Health Partners, Cincinnati, OH
- Cleveland Clinic, Cleveland, OH
- DCH Health System, Tuscaloosa, AL
- Edward Hospital & Health Services, Naperville, IL
- Grays Harbor Community Hospital, Aberdeen, WA
- Independent Hospital Network, Canton, OH
- Iowa Health System, Des Moines, IA
- Jordan Hospital, Plymouth, MA
- Kaleida Healthcare, Buffalo, NY
- Kootenai Health, Coeur D’Alene, ID
- Littleton Hospital, Littleton, NH
- MercyRockford Health System, Rockford, IL
- NYU Medical Center, New York, NY
- Oconee Medical Center, Seneca, SC
- Ohio Valley Hospital Consortium, Columbus, OH
- Regional Medical Center, Orangeburg, SC
- Roswell Regional Hospital, Roswell, NM
- Skaggs Community Health Center, Branson, MO
- Skagit Valley Hospital, Mt. Vernon, WA
- Somerset Hospital, Somerset, PA
- Texas Children’s Hospital, Texas
- Tidelands Health System, Georgetown, SC
- Tufts Medical Center, Boston, MA
- University of Florida Health, Jacksonville, FL
- Unity Point Health (formerly Iowa Health), Des Moines, IA
- University of Vermont Health Network, Burlington, VT
- University of Virginia Medical Center, Charlottesville, VA
- University of Washington; Valley Medical Center, Renton, WA
B. Approach and Methodology
SCA’s approach includes:
SCA insures the project is tailored to the client by:
SCA insures the integrity of information and data received by:
SCA engages the client in the evaluation and decision process by:
SCA’s approach includes:
- Developing consensus among client managers on their definitive needs and requirements.
- Assisting the client in developing and validating a “Market Basket” of clinical, medical surgical and pharmaceutical products, of the highest volume / price sensitive items that represent the bulk of the facility’s annual purchase volumes that could be sourced through GPO contracts.
- Soliciting GPO responses to a RFI/RFP that specifically seeks information on how the GPOs will address the identified qualitative needs and requirements as defined by the client.
- Creating all requested documents in order to facilitate the qualitative evaluation process, including conducting and presenting an analysis of the Request for Information (RFI) responses.
- Conducting a comparative cost analysis, based on the GPO’s responses to the Request for Proposal (RFP).
- Employing a sound market basket line item analysis methodology that compares true contract cost to contract cost as well as potential rebate to rebate thus keeping both components separate and quantifiable.
- Providing evidence to demonstrate which GPO will best serve the client, based on the qualitative and quantitative comparative analyses, industry experience, and best business practices methodology.
SCA insures the project is tailored to the client by:
- Performing an assessment of their needs and requirements through stakeholder interviews and obtaining input from a focus group of administrators and managers of supply intensive departments.
- Jointly developing a questionnaire for inclusion in the RFI aimed at determining the best GPO/client strategic fit. The requested information focuses on Organizational Philosophy, Operations and Finance, Membership, Programs and Services and Value Added programs.
- Developing a representative market basket of major supply cost drivers using historical purchase data and considering future program changes and potential variations in product use patterns.
- Jointly developing the RFI/RFP with the client including all qualitative and quantitative requests.
SCA insures the integrity of information and data received by:
- Performing quality assurance checks on each GPO response for completeness, accuracy, etc. This will include answering/resolving any issues or questions from the GPOs about the market basket items.
- Validating any questionable items directly with client and GPO.
SCA engages the client in the evaluation and decision process by:
- Summarizing the information into a qualitative report and facilitating the steering committee in the scoring of GPO responses.
- Jointly developing findings and conclusions.
- Participating in GPO finalist presentations.
C. Deliverables
SCA prepares and delivers a written report and an executive presentation of study results and conclusions. Deliverable will include a tabulated report of the Market Basket analysis, a summary matrix of value added services and supporting details, facilitation of the decision process and post decision negotiation support. See sample Market Basket summaries below.
SCA prepares and delivers a written report and an executive presentation of study results and conclusions. Deliverable will include a tabulated report of the Market Basket analysis, a summary matrix of value added services and supporting details, facilitation of the decision process and post decision negotiation support. See sample Market Basket summaries below.